Delek US Q3 2022 Earnings Call Transcript

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Provided by Quartr
November 7, 2022

Key Takeaways

  • Positive Sentiment: Record Q3 operational performance with refinery utilization at all-time highs and $136 million of adjusted EBITDA despite $225 million of FIFO inventory headwinds; starting in Q4, inventory impacts will be removed from adjusted results.
  • Positive Sentiment: Q4 capital return plan includes $75 million–$100 million of share repurchases and an increased quarterly dividend of $0.21 per share, underscoring the commitment to return cash to shareholders.
  • Positive Sentiment: Debt reduction strategy aims to retire $100 million–$150 million of debt in Q4 to lower leverage and maintain a flexible balance sheet.
  • Neutral Sentiment: Strategic review initiated with a corporate development lead and banking advisor engaged to explore options for unlocking the sum-of-the-parts value; detailed plan to be communicated upon completion.
  • Neutral Sentiment: Q4 operating outlook anticipates crude throughput of 280,000–290,000 bpd (~94% utilization) and operating costs of $190 million–$200 million, benefiting from lower natural gas and power prices.
AI Generated. May Contain Errors.
Earnings Conference Call
Delek US Q3 2022
00:00 / 00:00

There are 16 speakers on the call.

Operator

Good morning, and welcome to the Delek U. S. Third Quarter 2022 Earnings Conference Call. All participants will be in listen only mode. After today's presentation, there will be an opportunity to ask questions.

Operator

Please note, this event is being recorded. I would now like to turn the conference over to Blake Fernandez. Please go ahead.

Speaker 1

Good morning. I would like to thank everyone for joining us on today's conference call and web Ruben Spiegel, CFO Todd O'Malley, EVP and COO as well as other members of our management team. The presentation materials used during today's call can be found on the Investor Relations section of the U. S. Website.

Speaker 1

As a reminder, This conference call may contain forward looking statements as that term is defined under federal securities laws. Please see Slide 2 for our Safe Harbor statement. In addition to reporting financial results in accordance with Generally Accepted Accounting Principles or GAAP, we report certain non GAAP financial results. Investors are encouraged to review the reconciliation of these non GAAP financial measures to the comparable GAAP results, which can be found in the press release Posted on the Investor Relations section of our website, our prepared remarks are being made assuming that the earnings release has been reviewed As we are covering less segment and market information than is incorporated into the press release. On today's call, we'll begin with comments from Omnicol, Then Rouven will review financial performance and capitalization, Todd will cover guidance and CapEx, and then we'll turn it over to Q and A.

Speaker 1

With that, I'll turn the call over to Alfagal.

Speaker 2

Thanks, Blake, and good morning. We had another quarter of strong operational performance. Due to consecutive quarters of record refinery utilization And solid results excluding inventory FIFO movement. Additionally, the outlook for downstream energy industry is positive. I'm proud of the team execution and the focus on safety and reliability.

Speaker 2

Switching gears to talk about the priorities we laid out last quarter. 1st, returning cash to shareholders. We expect to repurchase $75,000,000 to $100,000,000 of our outstanding shares During Q4, we increased regular quarterly dividend to $0.21 per share. In the Q3, we exceeded our share repurchase guidance with a total of $40,000,000 of buyback. 2nd, focus on capital allocation.

Speaker 2

We plan to retire between $100,000,000 to $150,000,000 of debt during Q4. This reduces our debt level and maintain a flexible balance sheet. 3rd, we started our initiative to unlock The sum of the part value of our assets. We hired a Head of Corporate Development and engaged banker to advise us on strategic options. We will communicate our plan to the market once complete.

Speaker 2

After one full quarter in my role as a CEO, I continue to be impressed With the depth of our team and the strength of our operation, I'm excited by the many opportunities we have in front of us to deliver additional value shareholders and remain focused on execution on our key priorities. I look forward

Speaker 3

Thank you, Abhika. Net income was $7,400,000 or $0.10 per share. On an adjusted basis for the 3rd quarter, Delek US had net income of $1,100,000 or $0.02 per share compared to net income of $3,600,000 or $0.05 per share in prior year period. We had adjusted EBITDA of $136,000,000 in the 3rd quarter. This includes $225,000,000 of inventory headwinds associated with FIFO accounting.

Speaker 3

Beginning in the Q4, we will remove inventory impact from adjusted results. This should help put us on an equal footing with peers We provide a cash flow waterfall. Strong cash flow allows us to increase our buybacks and reduce debt. As Abigail mentioned, The Board approved $0.21 per share regular dividend that will be paid December 2nd to shareholders of record on November 18th. Slide 5 highlights our capitalizations.

Speaker 3

We ended the 3rd quarter with $1,150,000,000 of cash and on consolidated basis, we had $1,580,000,000 of net debt. Excluding debt at Delek Logistic of $1,430,000,000 we had 146 of net debt at DK as of September 30. In October, we had 2 noteworthy credit transactions. First, DKL extended its credit facility to $1,200,000,000 including senior secured revolving commitments of $900,000,000 with a maturity date in October 27 and a new secured term loan of $300,000,000 with a maturity date in October 24. Separately, Delek US expanded the asset based credit facility to $1,100,000,000 with a maturity date of October 27.

Speaker 3

Before handing it to Todd, I would like to mention a key near term initiative we have launched to evaluate our company's cost structure To ensure we remain competitive with peers, we have engaged advisors and are currently conducting this analysis. We plan to share additional information once we have With that, I will turn the call over to Todd.

Speaker 4

Thanks, Ruben. On Slide 6, we provide Q4 guidance for modeling purposes. Operating costs are forecasted to be in the range of $190,000,000 to $200,000,000 This is a reduction from 3Q levels, which is a result of lower natural gas and electricity prices and slightly lower utilization rates. G and A expenses in the 4th quarter are expected the second and fourth quarters of each year. Finally, interest expense guidance of $55,000,000 to $60,000,000 For the quarter, reflects the consolidated impact of DKL debt.

Speaker 4

During the Q3, our total refining system crude oil throughput achieved a new record Approximately 300,000 barrels per day. In the Q4 of 2022, we expect crude oil throughput to average between 280,000 And 290,000 barrels per day or approximately 94% utilization at the midpoint. On slide 7, Capital expenditures during the Q3 were $81,000,000 The full year 2020 $300,000,000 on a consolidated basis. Later this month, we will issue our 3rd annual sustainability report. We are focused on making continuous improvements in our ESG efforts and we encourage investors to monitor our journey.

Operator

Our first question is from Roger Read with Wells Fargo. Please go ahead.

Speaker 5

Yes. Thank you. Good morning. Good morning, Robert. I guess I'd like to come back to the capital allocation And slide number 3, I just understand partly because the share repurchase guidance Q4 is well above what I was putting in my model.

Speaker 5

How you're thinking about the share repos? Are we going to be kind of Going as we walk along here, margins stay elevated and so guidance will be more short term like this? Or are you thinking on A longer term basis of share repurchase magnitude and I'll tie that in I guess to the strategic Overview question, are we essentially waiting for that before we get a more long term guidance, I guess?

Speaker 2

Hey, Roger, it's Avigal. Good morning. How are you?

Speaker 5

Good morning.

Speaker 2

So we said in the previous call that we're going to put Shareholder friendly company in the top of our priority and we are working the walk not just talking the talk. If you remember last quarter, we bought back the dividend. We had a special dividend. We increased the total buyback program to $400,000,000 and we exceed our buyback guideline To $40,000,000 this quarter versus the guidance we gave of $25,000,000 to $35,000,000 Obviously, this quarter we gave the guidance of $75,000,000 to $100,000,000 and we are planning to do so. And we are also planning to reduce the debt.

Speaker 2

We obviously had a perception study with the investors and that's what investors are expecting us to do. Going forward, Roger, We look at very robust market and we see a very the company is performing very well. With that said, going forward, we are looking to continue with the buyback aggressively Well into 2023.

Speaker 5

Okay. Appreciate that. The other question just Operationally, as you look across your system and you're selling gasoline and diesel, any thoughts, any Specific numbers you can share in terms of what the sales look like compared to say prior quarter or compared to pre COVID period. Just how you're comparing on a demand side here?

Speaker 4

Yes. Hey, Roger, it's Tom. Good morning. I'll use our retail footprint, which I think It's clearly pretty representative of what happens inside of our kind of total envelope of refinery operations. And we're seeing same store fuel sales kind of 7% up year on year.

Speaker 4

And obviously, we have a certain footprint Of retail locations that are distillate heavy, we also have another subset that's gasoline heavy. So I think we're pretty good representation Across the Permian Basin and on a year on year basis, again, we're up and feeling good. The demand is sticky here. And certainly, the lower prices Recently have buttressed that view. So we feel good about where we are now and what the outlook looks like for 'twenty three on the demand side of the barrel.

Speaker 5

Thank you. Turn it back.

Speaker 2

Thank you, Roger.

Operator

The next question is from Ryan Todd with Piper Sandler. Please go ahead.

Speaker 6

Great. Thanks. Maybe I could follow-up. I know it's a hard question to answer, but As we think about the effort that you are I know you've engaged bankers, the effort you're making to try to address the sum of the parts discount on the stock. Can you maybe talk at high levels about if there's a view of what it is It's helping to drive the discount.

Speaker 6

Is it the consolidated debt of DKL on the balance sheet and the Perception of higher leverage than you really have, and are there at a high level, are there fundamental ways in which you think That is, if that's not the deal that it's best addressed in terms of any high level thoughts and maybe timing As we look forward, is this something that we may hear in the next couple of months, in 6 months? Any high level thoughts from that point of view?

Speaker 7

Hey, Ryan, it's Blake. I'll take a stab. As you know, there's any kind of number of things that can drive market dislocations. And so it's not always easy to pinpoint specifics. I think you hit on one of them for sure, the perception of, over leverage on a consolidated basis.

Speaker 7

And we have 10%, which is much more substantial now primarily due to the DKL acquisition of 3 Bear. And so to a generalist portfolio manager who goes and pulls our debt leverages on Bloomberg, we look very over levered, whereas if you deconsolidate the debt, we are not very So that's one of the drivers. I think one of the other issues is the lack of liquidity and float at DKL and that's something we've been progressively Trying to improve. I think we've benefited from being a kind of last man standing in terms of the rest of the MLP group going away And we've increased our weightings within various MLP indexes like the Elerian. So that is improving our trading volumes And should be something we can work with going forward as we evaluate some of the parts opportunities.

Speaker 7

And then the final thing I would highlight is during the downturn in COVID, We had to cut our dividend. Our refining system had negative EBITDA. I think we're starting to demonstrate now that the refining assets are actually very Profitable and delivering. And so I think that's just going to be something over time that investors get more and more comfortable with that as we can demonstrate we have strong Cash flow from these facilities, I think that's going to help. So at least from my perspective, those are 3 data points that I think are probably contributing to some of the disconnect.

Speaker 7

And as far as timing, we haven't really committed to anything specific. We are trying to demonstrate. We said We hired a corporate banker. Mark Hobbs came on board. We've now formally engaged banks.

Speaker 7

And so we're looking to demonstrate something that's probably over the coming months. I think it's Going to be fair to say we have an announcement of a plan. I don't think that necessarily means the plan effectuated. Obviously, depending on which route we go, that could take some time. But we do want to keep the market abreast of the progress we're making.

Speaker 6

Great. Thanks. That's very helpful. Maybe just as we look forward to 2023, you're spending $300,000,000 in CapEx This year in 2022, are there any large moving pieces that we should be thinking of in terms of next year's capital budget, Ballpark direction one way or the other?

Speaker 4

Yes, Ryan, it's Todd. I think $300,000,000 this year, obviously, a lot of that was dependent on growth that we've seen in gathering and across the system. Again, we continue to see that as long term strength. So we would anticipate that continuing through 2023. The one outlier I would say that we didn't have in 2022 was a turnaround at any of our plants.

Speaker 4

We did some small Surgical strikes, but we do have the Tyler turnaround scheduled at some point during the first half, at least initially right now Of 2023, we'll come back and update the market more on that as we get a little bit closer to defining exactly what that timeline is. I think marginally higher than that $300,000,000 in $23,000,000 is probably a good target to set for yourself as we go into end of year and next year planning.

Speaker 6

Perfect. Thanks, Todd.

Operator

The next question is from Carlee Davenport with Goldman Sachs. Please go ahead.

Speaker 8

Hey, good morning. Thanks for taking the questions today. Can you just talk a little bit about the efforts that you're making around the cost structure? Are Are there any numbers that you can put around the potential size of a program at this point or kind of any color you can provide about what kind of key areas you're targeting to drive efficiencies?

Speaker 9

Hi, Carly. It's Ruben. Well, we're looking at both The G and A and the OpEx as part of the zero budget process that we have started, we have some initial thoughts and findings. I think we want to complete the work, which will be done in the next few weeks, and then we will have the whole structure around it. I don't have an exact number to give, but we will communicate our goal once we are set on The many programs that will be under the 0 budget.

Speaker 8

Got it. Great. Thank you. And then the follow-up was just kind of Around the logistics side, as you've had a couple of quarters here with 3 Bear under your belt, kind of any key learnings that you would as you integrate those assets into the portfolio or any areas that have potential to surprise to the upside relative to initial expectations?

Speaker 2

Ali, thanks again. That's a great question. And when we spoke, we obviously discussed how a strategic debt acquisition for us, right, it's open up Not just from a geographic standpoint, but also from a line of product that we believe in.

Speaker 4

By and

Speaker 2

large, as I mentioned on the call, we are very pleased with the integration. The number is coming in line with our expectation, And we are very pleased. Going forward, we have a manage we have a business to manage, and we have a safe operation always to keep, And we want to get the most out of those assets and those the notification we got.

Speaker 8

Thank you.

Operator

The next question is from John Rehaut with JPMorgan. Please go ahead.

Speaker 10

Hey guys, good morning. Thanks for taking my question. So just a follow-up question on capital allocation. Looking at your guidance for both the buyback Debt pay down in 4Q, I'm assuming unless we have a major improvement in the macro that you're expecting to draw down some cash. And if so, I think you're sitting over $1,000,000,000 today in cash.

Speaker 10

Is there a thought to working that cash balance down over time and maybe doing more on the buyback Then you would see from your post dividend free cash flow, I know you talked about being aggressive on the buyback. So is that a safe assumption that you may continue to draw some cash?

Speaker 9

Hi, this is Ruben. Thank you for the question. I think if you look at the buybacks and dividend, these are done on Cash flow we're generating free cash flow we're generating. When it comes to reduction of debt, I think the way to look at it is a combination Of the 2, because on one hand, banks are paying for deposits today, but it's around 3%, 3.5%. And on the other hand, Since we have floating rate, we are getting increased rate on our loans.

Speaker 9

So we will use a combination of free cash flow And some of the cash that we have on the balance sheet to pay down the debt.

Speaker 10

Okay, great. That's helpful. Thank you. And then just looking for your updated view on Midwind differentials. Midwind continues to trade above What's your view on production growth versus takeaway in the Permian, in the midwind differential going into 2023?

Speaker 2

So that's a great question. We are looking at the middle production, and we obviously have we are very close To the producer we have over there, we have seen the rigs in our area coming up very nicely on the DPG area. But being more specific about differentials, Midland is going to get full Between 12 to 18 months from today more or less, we are today

Speaker 4

around 5,700,000 barrels a day.

Speaker 2

We've seen a nice increase More than 600,000 barrels last year. So we are optimistic on that differential going forward. And I think that we'll see more news around that front line

Operator

The next question is from Matthew Blair with Tudor, Pickering, Holt. Please go ahead.

Speaker 11

Hey, good morning. Do you have a target for your minimum cash balance? And is it reasonable to think that buybacks Would be more than your free cash flow after dividend in 2023?

Speaker 7

Matthew, I don't think we want to give a specific cash target per se. I think we've said historically that we need to maintain probably $500,000,000 $600,000,000 or so to run the business. Obviously, we're comfortably above that. It is nice to have additional dry powder and potential recession scenarios and or potential M and A. So I think where we're trending right now seems to be pretty comfortable.

Speaker 7

As Ruben We may use a little of the cash to pay down some debt, which probably makes sense given the arbitrage between interest expense and cash Benefit. In terms of 2023, I think you were asking are we going to basically use cash to do buybacks. I think Abigail is of the opinion that we're looking to use free cash flow. I don't think we want to pinpoint anything specific. I think the robust buybacks that we're looking at right now Before the sum of the parts scenario where we feel like the stock is really discounted, once we finalize the sum of the parts scenario, we understand what the various entities

Speaker 11

Sounds good. Thanks. And then, is there any update on your RD investment in terms of when it's expected to start up and When the contribution might flow in through to Delek?

Speaker 7

Yes, Matthew, I think the best thing to do is look at the Global Clean RJ, filings, the last, I believe, we have seen is that they had deferred the start up to March With, I believe, a 90 day option to extend. So just to be conservative, maybe you're looking at a midyear, next year kind of start up. And of course, we have a 90 day So it's probably feeling like a late second half of the year type of scenario should we enter the project.

Speaker 11

Got it. Thank you.

Operator

The next question is from Doug Leggate with Bank of America. Please go ahead.

Speaker 12

Hey, good morning, guys. This is Clay on for Doug. So thanks for taking the question. My first question is a follow-up on the oil basis. So WTI Brent has widened here modestly.

Speaker 12

Just hoping that you can give us an updated view on how you see this trending post the SPR releases And noting that the compression in U. S. To EU gas spreads also helps the economics on sour crudes.

Speaker 4

Yes, Clay, it's Todd. Thanks for the question. So I think you watch the markets as closely as anybody out there. We've kind of seen the Brent TI In the debt prompt, settle around that $7 ish range out the curve. We are Kind of mid to high fives to maybe low 6s on any given day.

Speaker 4

We firmly believe that due to what Avigal was commenting on earlier in terms of the dynamic between growth that we see in the Permian as well as no incremental takeaway capacity being built That Brent TI spread is going to continue to remain wide and roll up to that kind of 7 ish level on a go forward basis. Do the work and Brent and TI probably hold in at those wider levels. So I think that's what we're looking at for just 10 seconds.

Speaker 12

Appreciate that, Todd. My second question is on Waha basis on gas. So prices recently dropped to 0 because takeaway there is very tight It won't get fixed for another several quarters. So wondering if you can talk about how this benefits the OpEx and hydrogen costs at Big Spring?

Speaker 4

Yes. So we don't obviously break it down into individual plant level from that perspective. I think what we can say is that we are obviously keenly attuned to what's happening in the Waha area. We think that's going to continue to your point. And every day, we are working on the commercial side of the ledger To increase our exposure to Waha Gas, I think it's safe to say that Big Spring is 100% exposed to that market.

Speaker 4

We are again actively looking at different projects, some of which have kind of come to fruition through the acquisition of 3 Bear And the inclusion now of natural gas in our gathering and processing portfolio and using that to leverage into potentially Capitalizing on accessing Waha for some of the other facilities. So I think there's more to come on that and we'll continue to update the market as and when necessary.

Speaker 12

I appreciate it. Thank you.

Speaker 9

Thanks, Clay.

Operator

The next question is from Paul Cheng with Scotiabank. Please go ahead.

Speaker 13

Hey, guys. Good morning.

Speaker 4

Hey, Paul.

Speaker 13

Two questions, please. The first one, I want to talk about the hedging. And can you say share with us that what is the nature of the hedging that now you guys are doing and what is the in the future, are you going to reducing the activity or On the Audi in Vegas field, what is your current thinking? You're saying that if you do get in, it would The second half of next year, what is the latest intention on your current look? And also that just curious, You have 4 biodiesel plant or that the branding facility.

Speaker 13

Are those making money in the Q3? Thank you.

Speaker 7

Hey, Paul, it's Blake. Let me handle the first two and defer to Todd on number 3. So, on the hedging piece, As you know, we don't disclose specifics, but I will say this, I think as we said in the script that we're To then minimize the hedging because historically those 2 should be offsetting each other. But if we're able to adjust out the inventory, Then it really makes sense to reduce our hedging exposure. So our plan going forward is to probably minimize or reduce the amount of hedging that we've done historically.

Speaker 7

So I hope that answers that. That's really all we can say from that level of disclosure. On GCE, It's $13,000,000 for us to participate in a 30% interest. So I don't want to over commit to anything that we're going to do in the future, but I think most would view that as a fairly small amount Capital to participate in renewable diesel, to get our foot in the door and dabble. So I think it's likely that we would then I'll give it to Todd for the biodiesel plant.

Speaker 4

Yes. Thanks Blake. Paul, just to clarify, we actually have 3 Biodiesel facilities that exist inside of our footprint, those three facilities are indeed profitable And I will remind you, to a certain extent, exposed on the upside to LCFS, obviously, as well as what the D4 RIN does And a mix of various different feedstocks. So those are profitable and we continue to believe that they will be profitable on a go forward basis, But not in a material way that would impact results for the total corporation.

Speaker 13

Great. Can I just lead you in a very simple accounting question? Since you are under the FIFO accounting, why that we still have the LCM?

Speaker 7

Paul, let us come back to you offline on that. I think it's a small amount compared to the LIFO peers,

Operator

The next question is from Dan Kuts with Morgan Stanley. Please go ahead.

Speaker 14

Hey, thanks. Good morning, everyone.

Speaker 4

Hey, Dan.

Speaker 14

I just wanted to ask, I guess, kind of a broad high level question in terms of what you guys are seeing from a demand

Speaker 4

Yes, sure, Dan. This is Todd. As I mentioned a little bit earlier on the call, we're seeing sequential growth Basins, both on gasoline and diesel demand. We have obviously, in the last quarter, seen pretty robust product markets in New York Harbor area And in the Chicago land market, New York based on limited imports and some maintenance, Chicago based on Unfortunate incident that occurred at one of the refineries there in Toledo. Obviously, those are shorter term.

Speaker 4

But By and large, we see demand continuing to be robust in our footprint as well as elsewhere in the United States. Certainly, lower flat price Has continued to help make the consumer resilient. And I would say the last kind of shoe to drop that we've seen It's on the jet fuel side of things where we are effectively now back to kind of pre COVID levels and obviously can take advantage of that inside of our system. So I'll leave it there.

Speaker 2

And also just to wind on Todd's comments, also obviously the supply side is playing a huge role. That's pretty much the first time in the history of refinery that we see such a big reduction in production. And that also play the supply side is as important as the demand side that we see strong. So we remain, as we said, Very optimistic about the business and about the sector. Thank you.

Speaker 14

Great. Thanks a lot. That's really helpful color. And then, I guess I just was hoping that you could refresh my memory or let me know if there's any updates Kind of what your mid cycle EBITDA outlook is, appreciating that the backdrop Support above mid cycle earnings for the foreseeable future here, but just wondering with the 3 Bear acquisition and a lot of Kind of strategic projects underway, if you could share the latest on your mid cycle outlook? Thank you.

Speaker 2

Yes. Thanks. That's a great question and They can follow-up on that later on if you guys wanted. But we didn't give a specific guidance regarding the mid cycle. What I can tell you that When we look today, everyone is basically in a budget season as we speak.

Speaker 2

We see more Market, we think that the mid cycle is higher than we thought before. And on the top of that, we see a Strong demand coming from our customers. So going forward, we are optimistic, very optimistic about what we see from a Downstream demand and supply.

Speaker 14

Great. Thank you. I'll turn it back.

Operator

The next question is from Jason Gabelman with Cowen. Please go ahead.

Speaker 15

Hey, morning. Thanks for taking my questions. I want to first ask about the debt reductions that you discussed. And historically, I think you've carried both A high cash balance and high debt levels as well, but overall low net debt levels. Can you talk about why now is kind of the right time to reduce that debt and what maybe a gross debt target is for the business excluding The MLP, if you have one.

Speaker 15

And my second question is on the strategic initiatives That you're exploring, thanks for talking us through some of the considerations on that front. One that you didn't mention was just size of the parent business. And I wonder as you explore options to enhance value, If you think the DK parent is at the appropriate size or if there's any consideration In growing the business? Thanks.

Speaker 2

Yes. So I would like to 2 questions. I would like to be as specific It's okay. So we are doing the debt reduction. Obviously, there is incentive on the market because of disallocation between interest On the borrowing side and what you can get on the deposit side, our strategy of having meaningful cash On the balance sheet, it did not change.

Speaker 2

We still want to maintain a meaningful cash on the balance sheet to allow us, 1, to be ready for a rainy day if it presents itself And second, to be able to be quick and nimble about opportunities. But we are doing some adjustments. Some of them are, as Ruben alluded, Going to the second question, obviously, we just finished an acquisition with Triver June 1. So it's Just 5 months now, and we are very pleased about that, and we are digesting that. And our commitment Is to do inorganic growth only if it's accretive to shareholders.

Speaker 2

So it's not that we we are not going to do an M and A just for the sake of M and A, and we are not We are going to grow in order to allow the investor to have a good investment in our share and to have a creative investment in that. So I hope that, that gives you some guidance of what we're going to do or not

Speaker 15

Great. Thanks.

Operator

This concludes our question and answer session. I would like to turn the conference back over to Avadel Sorik for any closing remarks.

Speaker 2

Yes. So I want to thank first and foremost to our employees That we're able to have a record quarter from a utilization standpoint and operation. Very proud of the team's performance. I want to thank you, the investors, of staying with us and believing in the direct leadership. I want To thank the management team here in the room of running this company and guiding them to and Fulfilling the potential we can.

Speaker 2

So thank you for everyone and we'll meet again in the next quarter. Thanks.

Operator

The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.

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